Global Investment and Household Labor Supply: Evidence from Samsung's Entry in Vietnam

Abstract

We investigate how Samsung's investment in Vietnam affected household labor supply decisions. Samsung, a Korean firm, is the biggest producer and exporter in Vietnam, which created a transformative impact on the host economy. Examining the Vietnamese household living standard survey, I find a shift from informal employment, including self-employment, toward formal jobs, primarily into wage work and work for foreign firms, along with increased household expenditures and income in the provinces with Samsung production facilities. We observe smaller but significant results for households in the adjacent regions. Impacts are more substantial for households with female members aged 18-35, a demographic specifically targeted by Samsung's local recruitment efforts. Synthetic control analysis confirms our main results. Our study shows how a big foreign company hiring lessutilized demographic groups can cause a fundamental change in household labor supply behavior.